President Muhammadu Buhari has sent the 2020 Finance Bill to the House of Representatives for consideration and passage.
This was disclosed by the Speaker, Femi Gbajabiamila, when he was reading out Buhari’s letter at the opening of Tuesday’s plenary.
The bill proposes various amendments to existing tax laws and financial regulations in response to the negative impact of the COVID-19 pandemic on the economy and the current recession.
— House of Reps NGR (@HouseNGR) December 1, 2020
What you need to know
The Finance Bill 2020 “seeks to support the implementation of the 2021 Budget by proposing key reforms on taxation, customs, excise, and fiscal among others.
Federal Government proposed to slash import duties of tractors, transport vehicles, and others to further cushion current socio-economic conditions in the country.
Media aide to Vice President Yemi Osinbajo, Laolu Akande, tweeted:
“President Muhammadu Buhari’s administration is proposing more tax incentives in the 2020 Finance Bill including import duty reductions from 35 to 10% & 0% levies on tractors, transport vehicles & co, 50% reduction of minimum tax, specific TETFUND exemption.
“There would also be tax relief for contributions to the COVID-19 Relief Fund, while retirees’ compensation exemption threshold is to be raised from N10,000 to N10million & software acquisition would now qualify as capital expenditure allowing for tax recovery of same. Expect more.”
CAC registration: 100,000 business names registered for free so far
FG has announced that 100,000 business names have been registered for free under the CAC scheme.
The Federal Government of Nigeria announced that 100,000 business names have been registered for free by the Corporate Affairs Commission under its CAC Scheme in partnership with the Survival fund.
This was disclosed in a statement by the FG on Wednesday afternoon.
The FG said: “Pleased to announce that we have hit a milestone of 100,000 Business Names registered free of charge by CAC Nigeria as part of the Survival Fund NG”
“Registering these existing and new businesses brings them into the formal economy, with benefits for the Government and the businesses.”
What you should know
- Recall Nairametrics reported in October 2020 that President Muhamadu Buhari approved free business name registration with the Corporate Affairs Commission (CAC) for 250,000 businesses across the nation.
FG says slash on import duties for tractors, vehicles to start next week
FG has said the implementation of the reduction of import duty on vehicles and tractors may take off next week.
The Federal Government has said the implementation of the reduction of import duty on vehicles and tractors from 35% to about 10% may take off next week.
This is part of the provision of the newly signed Finance Act 2020 which was introduced by the federal government as part of the measures to ease the cost of transportation across the country and reduce the impact of the coronavirus pandemic.
According to a report from Punch, this disclosure was made by the Controller General of Nigeria Customs Service, Hameed Ali, during an interaction with journalists on Tuesday, January 26, 2021, in Abuja.
The customs boss said that the management of the service was expecting an official communication from the finance ministry on the matter any moment from now.
What the Controller General of Customs is saying
Ali said that the vehicle tariff reduction, which is part of the 2020 Finance Act, was initiated by the Nigeria Customs Service to ease the cost of transportation in Nigeria.
He said, “We are the proponents of the new tariff. I’ve been torn apart by many people criticising it, saying I used my connection to get it done. But it is in the overall interest of Nigeria.
“Now, it has become a law. We are now waiting for the finance minister to give us a formal conveyance of that Act. Once we receive it, we commence implementation immediately and inform our commands. We are hoping that latest by next week, it will become operational.”
What you should know
- It can be recalled as part of its bid to introduce tax incentives in the face of economic downturn, the Federal Government in November 2020, proposed a bill to slash import duties for tractors, buses and other motor vehicles and others from 35% to 10% and 0% to further help cushion the socio-economic conditions in the country.
- The Minister for Finance, Budget and National Planning, Zainab Ahmed, had explained that the need to reduce food inflation figures through one of the causative factors of high production cost, which is transportation, inspired the bill.
Africa needs regional infrastructure to speed up implementation of AfCFTA – CEO, Africa50
Africa urgently needs to deploy a regional infrastructure that would speed up the full implementation of the AfCFTA.
There is an urgent need for Africa to deploy a regional infrastructure that speeds up the full implementation of the African Continental Free Trade Area (AfCFTA) as many of Africa’s development challenges require cross-border solutions.
This assertion was made by Alain Ebobissé, CEO Africa50, in the Foresight Africa 2021 report published by African Growth Initiatives of the Brookings Institution, a non-profit organization devoted to independent research and policy solutions.
According to him;
- ”The Infrastructure Consortium for Africa found that in 2018, of a total of about $100 billion invested in African infrastructure, only 2 percent was for regional projects–simply not enough.
- “Unfortunately, financing becomes scarcer during crises, so what can leaders do? One strategy for securing financing is to encourage lenders to forgive or restructure public debts to give governments some fiscal space.
- “Another is asset recycling, which enables governments to unlock the capital they invested in profitable infrastructure assets, such as toll roads, power plants, airports, and fiber optic networks, by offering them to private sector investors under a concession model.
- “The freed-up capital can then be redeployed to fund stimulus plans and new infrastructure for the recovery phase, including in the health sector.
Why this matters
- Regional infrastructure and regional integration can raise growth and productivity through increased trade and investment, and hence increase competition as well as channels for productivity spill-overs.
- According to Alain Ebobissé, “Assets under management by African institutional investors alone are expected to rise to $1.8 trillion by 2020, so if we can tap even a fraction of this, we could substantially close the infrastructure gap.
- The capital flight brought about by the pandemic needs to be appropriately reversed by better-developing infrastructure projects that would attract investments and offer attractive risk-adjusted returns.
- No doubt, most investors want to be sure that they will be paid a fair price, can freely operate infrastructure assets and meet service level targets and can repatriate their profits when due.
- Development finance institutions can also leverage the opportunity therein by providing risk-hedging instruments and credit enhancements, as well as supporting local currency financing to strengthen local capital markets.